Whether Cenvat credit is admissible on Pest Control Service, Man Power Supply Service required for maintaining a garden in the factory premises & credit taken on the construction service utilized for making the compound wall of the factory?

PJ/Case Law/2013-14/1978

Case: NIRMA LTD VERSUS COMMISSIONER OF CENTRAL EXCISE & S.T., VADODARA-I

Citation: 2013 (32) S.T.R. 622 (Tri-Ahmd)

Brief fact :- The Appellant as per permission dated 3-08-2007 given by the Government of India, Ministry of Environment and forest, in Para 4 (vii) has conditioned the appellant to develop 33% of the factory area to mitigate the effect of emission all around the plant and to maintain it they are availing the service for maintenance and garden development and manpower supply for such garden maintenance & taking input service credit on the same. Whereas Commissioner (A) has rejected the credit on the same vide OIA NO. PJ/516/V.D.R.-I/2012-13, Dated 27-2-2013. Thereafter appellant has filed appeal before the tribunal against such OIA NO. PJ/516/V.D.R.-I/2012-13.

Appellant’s Contention: -The Learned consultant on behalf of the appellant argued that as per permission dated 3-08-2007 given by the Government of India, Ministry of Environment and forest, in Para 4 (vii) has conditioned the appellant to develop 33% of the factory area to mitigate the effect of emission all around the plant and to maintain it they are availing the service for maintenance and garden development and manpower supply for such garden maintenance. He relied upon their own case law of CCE, Bhavnagar v. Nirma Ltd. [2010(20) S.T.R. 346 (Tri- Ahmd.) = 2012 (277) E.L.T. (Tri-Ahmd). Further he relied on the judgment of CCE, PUNE- II v. Raymond Zambaitti Pvt. Ltd [2010 (03) LCX 0121= 2010 (18) S.T.R. 734 (Tri- Mumbai) in so far as admissibility of credit on construction service for compound wall around the factory is concerned.

Respondent’s Contention:- Learned AR argued that the reasoning given by the Commissioner (A) is proper and emphasized that the credit have been correctly rejected.

Reasoning of Judgment: - The Tribunal held that service in relation to development and maintenance around the factory premises has to be eligible for availing Cenvat credit to fulfill statutory condition of controlling environmental pollution. Similarly Manpower engaged for maintaining such landscape are also eligible as input service credit as also held in their own case decided by the CESTAT, WZB, Ahmadabad, in case reported as [2010 (20) S.T.R.346 (Tri-Ahmd). Further it is observed that during the relevant period, construction service utilized for establishing the factory were eligible for Cenvat credit. A compound wall around the factory is essential to demarcate the registered factory premises and also to save the manufactured goods from pilferage and potential clandestine removal. Such a compound wall has to be considered as essential element for the completion of factory and activity in relation to manufacture of excisable good. Accordingly service utilized for construction of such compound wall is eligible for Cenvat Credit as Input Service under rule 2(1) of the Cenvat Credit rules. The similar view was also supported by the judgment of CESTAT, Mumbai in case of CCE, Pune-II v. Raymond Zambaitti Pvt. Ltd (supra) relied upon by the appellant.

Decision: - The Appeal was allowed.

Comment:- It was held in this case that Cenvat Credit admissible for service of manpower for maintaining garden to mitigate the effect of pollution as per direction of Ministry of environment & Forest and also Service for construction of compound wall are input service as such construction are essential to demarcate registered factory premises and for protection of goods from pilferage and potential clandestine removal.

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PJ/Case Law/2013-14/1978

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